Nifty has broken of of a six year consolidation period, since 2008 having made consecutive higher bottoms with a stiff resistance at 6300-6350 levels. The ascending triangle formation is a bullish continuation pattern, and with Nifty breaking the resistance of 6300-6350, has come out of the ascending triangle with a long term target of 10,000.
As market discounts fundamentals at least 3-6 months in advance, all domestic factors such as the election results, political stability, inflation control, GDP growth, current account deficit, upturn in business cycle, favourable economic policies etc. are all being priced in. Though, key performance indicator from the government data and corporates results currently hardly give any reasons to rejoice.
Lack of investment options to invest in other emerging markets like Russia, Brazil and China, makes India an attractive investment destination receiving disproportionate share of investible funds. The interest rates in US are low but with a rise in inflation, the real interest rate would make investment in US unattractive.Coupled by the fact that fund outflow continue from Japan and the view that US markets may underperform, fund managers are allocating a larger share of funds to emerging markets like India and Indonesia.
As markets move ahead, more compelling reasons to invest in Indian will follow. Has the retail investor missed the bus again??
See our earlier posts :
http://eqtrend.blogspot.com/2014/03/modi-wave-or-new-bull-market_7.html
http://eqtrend.blogspot.com/2014/03/a-new-bull-market.html
